Listening to the Customer -The Concept of a Service-Quality Information System

Abstract

The full text of this article is available free to all site visitors, compliments of IBM, as part of our ongoing Business Insight series. Jointly produced by MIT Sloan Management Review and The Wall Street Journal, Business Insight offers fresh thinking on crucial management issues supplemented by the deep knowledge of related, classic SMR articles, of which this is one. Read the Business Insight article to which it relates and other SMR classics on the topic, all free full text. Feedback from customers is vital to companies in their efforts to improve service. But companies must ensure that they have multiple perspectives from different customer groups. The authors advocate a listening system that uses many research approaches in combination to capture, organize, and disseminate information. Four in particular are essential: transactional surveys; customer complaint, comment, and inquiry capture; total market surveys; and employee surveys. The five elements of the service-quality information system are: 1. Measure service expectations. Companies frequently measure only customers' service perceptions, when they should be including their expectations about level of service, both what they desire and what they deem adequate. Expectations provide a frame of reference when considering customers' perception ratings. 2. Emphasize information quality. In evaluating information, companies should ask if it is relevant, precise, useful, in context, credible, understandable, and timely. 3. Capture customers' words. The system should include both quantitative and qualitative databases. Quantified data are more meaningful when combined with customers' verbatim comments and videotapes. 4. Link service performance to business results. What impact does service performance have on business results? Companies need to calculate lost revenue due to dissatisfied customers, measure customers' repurchases, and gauge the relationship between customer loyalty and propensity to switch. 5. Reach every employee. Companies should disseminate customer feedback to all employees. They are decision makers who affect the quality of service at all levels. Berry and Parasuraman suggest that managers need to make listening to customers a habit and find ways to personally hear customer feedback. Only then can they make decisions to improve service.

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